ЁЯУв Too many exams? DonтАЩt know which one suits you best? Book Your Free Expert ЁЯСЙ call Now!

    Question

    Which of the following ratio is useful in evaluating

    credit and collection policies?
    A Average payment period Correct Answer Incorrect Answer
    B Current ratio Correct Answer Incorrect Answer
    C Average collection period Correct Answer Incorrect Answer
    D Inventory turnover ratio Correct Answer Incorrect Answer
    E Quick ratio Correct Answer Incorrect Answer

    Solution

    The average collection period is used as an accounting measure to symbolize the avg. No. of days among a credit score sale date and the date whilst the customer remits payment. An entityтАЩs average collection period indicates the effectiveness of its Accounts Receivable (or Trade Receivables) Management.

    Practice Next
    More Financial Management Questions

    Relevant for Exams:

    ask-question